FLS Group v Goldinger
Annotate this CaseDecided on October 27, 2004
Supreme Court, Nassau County
FLS Group, Plaintiff,
against
Gary Goldinger, STEWART TITLE INSURANCE CO., and THE ULTIMATE AGENCY, INC., Defendants.
007620/04
John M. Galasso, J.
defendants Gary Goldinger and The Ultimate Agency, Inc's motion for an order dismissing the complaint in its entirety and with prejudice pursuant to CPLR §3211 for failure to state a cause of action is denied.
The underlying action which this motion addresses arises out of a real estate transaction. There were many problems and title issues involved in the transfer of the property. At issue here was a purchase money mortgage held by the former owners.
Plaintiff FLS was the seller of the properties, Ultimate the title company and Gary Goldinger its president. Stewart Title Insurance Company was hired by the purchaser to insure title. Ultimate acted as their agent.
The face amount of the purchase money (private) mortgage, which was duly filed and recorded with the Nassau County Clerk's Office was $145,000.00. In order to close it was necessary that plaintiff FLS, as the seller, provide a pay-off letter at the time of closing indicating the mortgage was satisfied and the original note marked "paid in full." Typically, a mortgage of this nature can be purchased by anyone that has the funds to do so. A plaintiff seller maintains the right of pay-off and to negotiate for a reduced sum until it is purchased by another party.
Plaintiff's complaint is based on their contention that prior to closing they were negotiating a
FLS v. GOLDINGER, et al
Index No. 007620/04~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2
settlement with the original mortgage holder for a reduced pay off of $114,00.00. The settlement was also to satisfy other disputes regarding the property not at issue here.
Plaintiff advised their attorney of the terms of the negotiated settlement and, according to plaintiff's attorney, he contacted Phyllis Camposan of The Ultimate Agency and told her he could not provide the satisfaction of the purchase money mortgage at closing and asked that money be placed in escrow pending delivery of the required satisfaction within 30 days of the closing date. They agreed to the sum of $150,000.00.
Subsequent to the above conversation defendant Cary Goldinger learned from a principle of plaintiff, Larry DiFalco, the background of the negotiations and that the parties had agreed to $114,000.00. Mr. Goldinger informed Mr. DiFalco that $180,000.00, not $150,000.00 would nevertheless, be required for an escrow pending satisfaction at closing, which was finally scheduled for Monday, March 1, 2004. The holders of the private mortgage were also to attend.At the closing in which the sellers, buyer and the title company including defendant Goldinger attended, the escrow agreement for the amount of $180,000.00 was prepared. Plaintiff contemplated that at closing a certified check of $114,00.00 would be obtained and delivered to the purchase money mortgage holder who in turn would exchange the satisfaction.
The closing, however, was not completed until past business hours and a certified check could no be obtained the same day. The next morning Plaintiff was able to have a check certified and so advised their attorney who represented them for the purpose of negotiating the settlement of the purchase money mortgage. He in turn contacted the mortgage holder's attorney and learned for the first time that it had been purchased the Friday before for $114,000.00.
Plaintiff's principle contacted defendant Goldinger who advised him $180,000.00 would still be necessary to satisfy the newly purchased mortgage according to the agreement signed at closing. Plaintiff's attorney was unable to ascertain from defendant Goldinger information as to who purchased the mortgage during that conversation. It was later learned that defendant Gary Goldinger, principal of Ultimate, the title company, had done so.
On March 9, 2004, Ultimate mailed plaintiff a check for $35,000.00 as the purported balance of the escrow funds. The check was cashed.
This resulted in plaintiff paying $145,000.00, the original amount of the mortgage as recorded, to [*2]satisfy a mortgage for which defendants paid $114,000 at a loss of $31,000.00 to plaintiff.
FLS v. GOLDINGER, et al
Index No. 007620/04~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~3
Plaintiff has asserted the following four (4) causes of action against defendant Ultimate in
connection with the real estate transaction: (1) breach of its fiduciary duty; (2) breach of the escrow agreement; (3) breach of contract; and (4) breach of an implied covenant of good faith and fair dealing. In its complaint, has plaintiff has also asserted the following seven (7) causes of action again the president of Ultimate Gary Goldinger, personally, in connection with the real estate transaction: (1) fraud; (2) violation of the Code of Professional Responsibility and malpractice; (3) breach of his fiduciary duty; (4) breach of his oral agreement; (5) breach of an implicit covenant of good faith and dealing; (6) unjust enrichment; and (7) sanctions and compensatory and punitive damages.
At the very least plaintiff has set forth the elements necessary to recover for the intentional business tort of interference with prospective advantage (see PJI 3:57).
Although ordinarily a title company is the fiduciary of the buyer, a fiduciary relationship may exist when one party reposes confidence in another and reasonably relies on the other's superior expertise or knowledge (WIT Holding Corp. v. Klein, 282 AD2d 527). Whether a fiduciary relationship exits between parties in an otherwise arm's 's length business relationship is a question of fact (e.g., LaBarte v. Seneca Resources Corp., 285 AD2d 974), as is whether it has been breached (Zimmerman v. Rokart, 242 AD2d 202).
Motion denied.
Dated: October 27, 2004 .........................................................J.S.C.
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